LLMs in Production 102: Addressing LLM Hallucination with RAG

What are LLM Hallucinations?

Large Language Models (LLMs) are prone to occasional inaccuracies, termed LLM hallucinations, which can severely impact various applications. A notable case, highlighting the adverse effects of LLM hallucination, involved a US Air Force veteran's lawsuit against Microsoft. The Bing AI-generated summary, while searching for information against the veteran's name, gave a hallucinated-inaccurate response by combining information on two different people. This case highlights the significant real-world impacts or serious repercussions resulting from these mistakes.

LLMs (such as OpenAI GPT-4, Anthropic Claude3, Meta Llama3, etc.) trained extensively on high quality text data, may still produce factually incorrect outputs, known as 'hallucinations'. These errors arise because LLMs prioritise coherence over unbiased accuracy during training– the model generates outputs based on patterns and probabilities in its training data rather than verifying facts.

To combat LLM hallucinations, Retrieval-Augmented Generation (RAG) has emerged as a viable solution. By integrating external knowledge from databases and structured/unstructured repositories, RAG enriches the context available to LLMs during the generation process. This augmentation enhances the quality and reliability of LLM outputs, reducing the occurrence of hallucinations.

For instance, consider a scenario where an LLM-powered medical diagnosis application occasionally produces hallucinated symptoms, leading to erroneous diagnoses and potential patient harm. Through RAG's integration, the application can access reputable medical databases, providing additional context and ensuring more accurate diagnostic suggestions. This not only safeguards patient well-being but also enhances trust in AI-driven healthcare solutions.

Types of LLM Hallucinations

Understanding the types of hallucinations that LLMs may exhibit is crucial for developing strategies to mitigate their impact and enhance the reliability of LLM-generated content. The following are some known hallucination patterns observed in LLM responses.

1. Source Conflation: This refers to when a language model combines details from different sources, sometimes leading to contradictions or even creating fictional sources. For example, if an LLM is trained on multiple news articles about a topic, it might merge information from different articles, resulting in inconsistent or fabricated details in its output. This is the exact case that was observed in the Microsoft lawsuit.

2. Factual Errors: LLMs can produce content with factual inaccuracies due to the vast amount of data they are trained on, which includes information from the inherently imperfect internet sources. These errors can range from minor inaccuracies to significant misrepresentations of reality, potentially leading to misinformation being propagated.

3. Nonsensical Information: LLMs generate text by predicting the next word based on probability, which can sometimes result in grammatically correct but meaningless output. This phenomenon can mislead users into believing that the generated content is authoritative and accurate when, in fact, it lacks coherent meaning or factual basis.

4. Fact-Conflicting Hallucination: Fact-conflicting hallucination occurs when language models generate information or text that contradicts established facts. These errors can arise at any stage of the LLM life cycle and may stem from various factors.

5. Input-Conflicting Hallucinations : Input-conflicting hallucinations occur when the output produced by an LLM diverges from the user's specified task direction or task material. For instance, if a user requests a summary of a document but receives irrelevant information or inaccuracies instead, it indicates a misinterpretation of the user's objectives. Alternatively, if the discrepancy lies between the generated content and the provided task material, as in machine translation or text summarization tasks, it aligns with the conventional understanding of hallucination.

6. Context-Conflicting Hallucination : Context-conflicting hallucination involves LLMs generating outputs that are inconsistent or contain self-contradictions, particularly noticeable in longer or multipart responses. These hallucinations occur when LLMs overlook broader context or struggle to maintain coherence throughout an interaction. This limitation becomes evident in scenarios where maintaining contextual awareness or identifying the necessary context for coherence poses challenges for the model. For example, imagine a business scenario where an LLM is tasked with generating a financial report based on a company's quarterly earnings. If the generated report contains factual inaccuracies or contradictions with the provided financial data, it could lead to misleading insights and financial decision-making. Similarly, in customer service interactions, if an LLM provides inconsistent responses to customer inquiries, it could undermine the company's reputation and erode customer trust.

Fixing LLM Hallucinations: The Mechanism of Retrieval Augmented Generation (RAG)

Retrieval-Augmented Generation (RAG) is an innovative approach aimed at enhancing the performance of LLMs by seamlessly integrating external knowledge sources. At its core, RAG leverages the vast reservoir of information available in external knowledge bases, databases, or repositories. Moreover, RAG is designed to adapt dynamically to changing input contexts and evolving knowledge sources, enabling it to stay abreast of the latest information and adjust its generation process accordingly. Here's how RAG works and its impact on reducing LLM hallucinations, along with examples:

1. Retrieval-Based Approach : Let's say we have an LLM tasked with generating a summary of a research paper. Instead of relying solely on the input document, RAG incorporates a retrieval component that searches external databases or articles related to the paper's topic. For example, if the research paper discusses climate change, RAG might retrieve additional information from reputable scientific journals or climate databases.

2. Generation-Based Approach : Once relevant information is retrieved, RAG utilises the generative capabilities of LLMs to synthesise a summary that integrates both the input document and the retrieved knowledge. For instance, the LLM might generate a concise summary of the research paper while incorporating key findings and insights obtained from the external sources retrieved by RAG.

3. Contextual Fusion : RAG seamlessly integrates the retrieved information with the input context, ensuring that the generated summary maintains coherence and accuracy. For example, if the retrieved information includes recent climate data or relevant scientific theories, RAG fuses this additional context into the summary, providing a more comprehensive and insightful overview of the research paper.

4. Hallucination Reduction : By leveraging external knowledge sources, RAG helps mitigate hallucinations by grounding the generated text in verified information. For instance, if the LLM tends to produce inaccurate or misleading summaries due to semantic drift or factual errors, RAG's integration of external knowledge can provide factual grounding and context, reducing the likelihood of hallucinations occurring.

Let's consider a business scenario where a company's marketing team is using an LLM to generate product descriptions for an e-commerce website. Without RAG, the LLM might occasionally produce hallucinated descriptions that contain factual inaccuracies or irrelevant details, leading to customer confusion or dissatisfaction.

However, by implementing RAG, the marketing team can enhance the accuracy and reliability of the generated product descriptions. For instance, RAG could retrieve additional product information from the company's database, customer reviews, or industry reports. This retrieved knowledge could then be integrated into the product descriptions generated by the LLM, ensuring that they are factually accurate, contextually relevant, and free from hallucinations. RAG's integration of external knowledge sources empowers LLMs to produce more accurate, reliable, and contextually enriched text, thereby reducing the occurrence of hallucinations and enhancing the quality of generated content across various applications.


  • Enhanced Accuracy: RAG improves the accuracy of LLM-generated outputs by supplementing them with verified information from external sources.

  • Reduced Hallucinations: By leveraging external knowledge, RAG mitigates hallucinations, leading to more reliable and trustworthy text generation.

  • Contextual Enrichment: RAG enriches the input context with relevant information, enabling LLMs to produce more coherent and contextually appropriate responses.


  • Dependency on External Sources: RAG relies on the availability and reliability of external knowledge sources, which may introduce bias or inaccuracies into the generated text.

  • Computational Complexity: The retrieval and integration of external information add computational overhead to the text generation process, potentially increasing latency and resource requirements.

  • Scalability : Scaling the model to effectively handle large datasets and queries while upholding performance can be complex.

  • Limited Scope: RAG's effectiveness may be constrained by the coverage and relevance of available external knowledge sources, particularly in niche or specialised domains.

Alternatives to RAG Mechanism 

In addition to Retrieval-Augmented Generation (RAG), there exist alternative approaches to mitigate LLM hallucinations. Here's an overview:

1. Fine-Tuning : Fine-tuning involves adjusting the parameters of pre-trained language models to better suit specific tasks or domains. By fine-tuning the model on task-specific datasets, developers can enhance its performance and reduce the likelihood of hallucinations. For instance, fine-tuning an LLM on a dataset of medical texts could improve its accuracy in generating medical reports or diagnoses.

2. Advanced Prompting : Advanced prompting techniques involve providing the model with carefully crafted prompts or instructions to guide its generation process. These prompts can help steer the model towards producing more accurate and contextually relevant outputs. For example, providing the LLM with structured prompts that specify the desired format or content of the generated text can help reduce hallucinations and improve output quality.

3. Adversarial Training : Adversarial training involves training the LLM alongside another model, known as a discriminator, which evaluates the generated outputs for accuracy and coherence. By iteratively refining the LLM based on feedback from the discriminator, developers can improve its performance and reduce hallucination tendencies.

4. Diverse Ensemble Methods : Ensemble methods involve combining multiple LLMs or models trained on different datasets to generate diverse outputs. By leveraging the collective intelligence of diverse models, developers can reduce the risk of hallucinations and improve the overall robustness of the generated text.


Minimising hallucinations in Large Language Models (LLMs) is paramount for ensuring their dependability and maximising their utility across diverse sectors. The discussed strategies, including Retrieval-Augmented Generation (RAG) and other advanced techniques, present a comprehensive approach to effectively address this challenge. RAG offers a promising solution by integrating external knowledge sources, thereby enriching the context and reducing the likelihood of hallucinations. Additionally, fine-tuning models with curated datasets and deploying sophisticated algorithms further enhance model accuracy and reliability.

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